Biotechnology companies have been hit hard by the global economic crisis, as seen by recent and unprecedented bankruptcy filings, as well as in the cut in funds allocated to the development of new drugs to treat diseases such as multiple sclerosis, Alzheimer’s and Parkinson’s.
Last month, at least five biotechnology companies have had their attorneys file bankruptcy for them, something unusual for the industry. Biotechnology bankruptcies have been relatively rare, as struggling companies have opted for other solutions, such as new investors, mergers, or new licensing or development deals.
Tactics used by some biotechnology companies to avoid bankruptcy include downsizing, moving to smaller offices, shelving early research projects and delaying research on new drugs, all in order to avoid looking for a bankruptcy attorney.
Investors are expected to come back once the economy gets stable, so the biotechs continue working on projects like a prostate cancer therapy, a polio vaccine and new diabetes treatments.
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